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Acadia Healthcare (ACHC) Q3 Earnings, Revenues Lag Estimates

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Acadia Healthcare Company Inc. (ACHC - Free Report) reported third-quarter 2017 adjusted earnings of 58 cents per share, missing the Zacks Consensus Estimate by 10.8%. Moreover, earnings remained flat year over year.

During the reported quarter, the company witnessed better performance with respect to its U.S. operations, despite the substantial impact from the unprecedented hurricane activity, which lowered the quarter’s earnings by 2 cents per diluted share.

The results of the third quarter were primarily affected by the divestiture of 22 facilities in the U.K. as of Nov 30, 2016.

Quarter Details

Acadia Healthcare’s revenues for the third quarter declined 2.4% to $716.7 million from the prior-year quarter, missing the Zacks Consensus Estimate by 1.5%. The decline could be attributed to higher provision for doubtful accounts.

Same facility revenues increased 5.5%, with a 3.5% increase in patient days and a 1.9% increase in revenue per patient day.

The same facility revenue growth can be attributed to the addition of more than 600 new beds to existing facilities in the 12 months ended Sep 30, 2017. To existing facilities, 179 new beds were added. The company anticipates to add 800 new beds to existing facilities and de novo facilities in 2017.

U.S. same facility revenues were up 6.3% from the year-ago quarter. The company also recorded a 4.2% increase in patient days from 2016.

U.K. same facility revenues inched up 3.8% year over year to $236.4 million. The number of patient days rose 2.5% from the year-ago quarter.

We note that revenues per patient day were up approximately 2% in the United States and rose 1.3% in the U.K.

Total expenses declined nearly 23% year over year to $655.3 million due to lower salaries, wages and benefits, supplies, interest expenses, as well as rents and leases.

Financial Update

Cash and cash equivalents as of Sep 30, 2017 were $75.7 million, up 32.6% from year-end 2016.

Long-term debt was $3.2 billion as of Sep 30, 2017, down 0.6% from the 2016-end level.

Net cash provided by operating activities for the nine months ended Sep 30, 2017 was $271.3 million, up 4.5%, compared to the same period in 2016.

2017 Guidance

The company expects adjusted earnings per diluted share between $2.23 and $2.25 on revenues of $2.82-$2.83 billion.

Adjusted EBITDA is expected between $600 million and $605 million.

The company expects an exchange rate of $1.28 per British Pound Sterling and a tax rate of about 25%.

Zacks Rank

Acadia Healthcare currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Companies from the Medical Sector

Among the other firms in the medical sector that have reported their third-quarter earnings so far, the bottom line of Centene Corp. (CNC - Free Report) , Quest Diagnostics Incorporated (DGX - Free Report) and UnitedHealth Group Inc. (UNH - Free Report) beat their respective Zacks Consensus Estimate.

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